Startup's cancer therapy preps for 2014 clinical trials

Photo | Pablo Robles

Connecticut startup Kolltan Pharmaceuticals Inc. plans to begin clinical trials this year on its new cancer treatment. If the novel drug therapy proves effective it could be an industry game changer, said Kolltan CEO Gerald McMahon, pictured above.

Kolltan Pharmaceuticals research scientist Ed Natoli works in the company’s New Haven lab.

At a Glance

Kolltan Pharmaceuticals Inc.

Year founded: 2007

Number of employees: 35

Expected clinical development of first antibody: Early 2014

Funding raised to date: $75 million

Sujata Srinivasan

A Connecticut startup developing a new cancer treatment is drawing the eyes and interest of investors and big pharma, as it prepares to begin clinical trials this year on its drug discovery.

Kolltan Pharmaceuticals Inc. is developing a drug therapy that targets and aims to block chemical signals in cancer cells that help form tumors.

The New Haven privately-held firm got its start based on lab discoveries from Yale professor Dr. Joseph Schlessinger, and hopes to eventually tap into a $24 billion cancer drug market for targeted antibody therapies.

Kolltan has raised $75 million from a host of life science investors and signed a key licensing agreement in July with MedImmune, the R&D arm of bio pharmaceutical giant AstraZenca.

"Our goal is to build an industry-leading company that can generate and develop novel [drugs] for use in oncology and other severe diseases," said Gerald McMahon, a former MedImmune executive who took over as Kolltan's CEO in 2012.

Kolltan is developing what's known as monoclonal antibody drugs, or mAbs. The mAb antibodies target receptors that exist on the surface of a cell known as receptor tyrosine kinases (RTK), which send growth signals to cancer cells, causing those cells to multiply.

The goal of the antibodies is to block that signal and prevent the cancer cells from duplicating. MAbs mimic the antibodies naturally produced by the body as part of the immune system's response to germs and vaccines.

Kolltan has exclusively licensed from MedImmune its lead product — KTN3379 — which targets an enzyme within the RTK protein, known as ErbB3. ErbB3 is linked with many different cancers.

As part of the licensing agreement, Kolltan and MedImmune will share future costs, risks, and profits for the KTN3379 product after Kolltan completes early clinical testing, scheduled to begin in the first quarter of 2014.

As a small startup, Kolltan, which also has a licensing agreement with the Yale School of Medicine, will face pressure to prove its drugs are potent and active early in the clinical development process, said McMahon.

"As a consequence, we're focused on targets that will show themselves in early clinical study by reductions in tumor growth, or shrinkage of tumors, or doing something that has been traditionally difficult to do, to warrant further development," he said.

Clinical trial success, McMahon said, will depend on choosing the right patients.

"In oncology, this has been a rampant problem for many years, where therapies have not been matched to patients," he pointed out. To confront this issue, Yale physicians and Kolltan are working together to match the right patients with the drugs that are being developed and tested.

Yaron Hadari, Kolltan's vice president of research, said Kolltan's product could work by itself or in combination with currently available therapies such as radiation and chemotherapy.

"Once some of our products reach the clinic, some of those clinical trials will be a combination of our antibodies and other kinds of therapies — chemo or some other agent that targets the signaling pathway," he said.

To date, the Food and Drug Administration has approved at least 12 different mAb cancer treatments. The Roche Group has the most approved mAb therapies, with a single drug, Avastin, generating $6.3 billion in sales in 2012.

Depending on its speed to market, Kolltan's drug therapy has the potential to differentiate itself as the only mAb treatment that targets the ErbB3 enzyme, which impacts the progression of cancer and the overall survival of patients with breast, ovarian, lung, and colorectal cancers.

"To date, no ErbB3 product has demonstrated activity in a Phase II study that would signify a competitive position and there are no ErbB3 targeted agents in the market," said Jonathan Soderstrom, managing director at Yale University's Office of Cooperative Research and a Kolltan board member.

Additionally, a major limitation with current mAb treatments is that many patients develop resistance in later dosing cycles, and could ultimately stop responding to therapy.

McMahon said Kolltan's drug won't be impacted by that resistance. If clinical trials prove that, it could mean big business, and a major medical breakthrough for Kolltan.

According to the American Cancer Society, more than 1 million people in the U.S. alone get cancer each year.

"The true champion among these medications, which will be the life saver to cancer patients, will be that drug which can overcome the resistance challenges," said Madhavi Gorusu, an oncologist and assistant clinical professor at the University of Connecticut School of Medicine.

Meanwhile, large pharmaceutical companies that are beginning to see patent expirations on older drugs for other diseases are jumping on the mAb bandwagon directly, or through aggressive acquisitions to fuel future sales.

According to J.P. Morgan Chase & Co., around 25 percent of deals in the biotech industry that are more than $100 million are in oncology. The $10.4 billion purchase of Onyx Pharmaceuticals Inc. by Amgen Inc., for example, was one of the biggest deals in 2013.

Meanwhile, a report by RNCOS estimates the market for just oncology mAbs is close to $24 billion, and is expected to grow to around $34 billion by 2017.

A year's worth of mAb drugs for one patient could cost up to $120,000.

So far, Kolltan has raised $75 million in private capital from a host of life science investors — Purdue Pharma L.P., HBM BioCapital L.P., KLP Enterprises, to name a few.

It's future success in raising money, or establishing partnerships with other big pharma companies, will largely depend on clinical trial outcomes, said Soderstrom.

Part of Kolltan's strength is its deep bench of talent and expertise, which it has been building in recent months.

The firm was co-founded in 2007 by Schlessinger and Arthur G. Altschul Jr., formerly of Goldman, Sachs & Co. George D. Demetri, a physician and professor at Harvard Medical School's department of medicine, is the founding chairman of the Kolltan clinical advisory board.

He is also the director of the Center for Sarcoma and Bone Oncology at the Dana-Farber Cancer Institute in Boston.

McMahon joined the company in April 2012, replacing Altschul Jr., who had been interim CEO. Altschul Jr. remains executive chairman.

Previously, McMahon was president at Sugen, a company that Schlessinger co-founded, and that was acquired by drug giant Pfizer Inc. after Sugen's initial acquisition by Pharmacia & Upjohn.

In September, Dr. Carolyn F. Sidor joined Kolltan as senior vice president and chief medical officer.

"Kolltan has a management team and board of directors with a track record of success in bringing products to patients and creating significant value to shareholders," McMahon said.

He added that Kolltan's "near term goal is to advance our products into clinical testing and generate data that would support registrational clinical studies and marketing applications. We are open to partnerships to enable funding of these clinical trials and enable access to global commercial markets."